When hiring workers for your business, you may consider hiring someone internationally on a contract basis. It's a common approach for many small businesses and startups, especially where experienced and qualified candidates can be engaged for project work at a lower rate compared to someone in the UK.
But while there can be benefits to overseas outsourcing, it can sometimes be more complicated than hiring someone from within the UK.
Here are some important points to keep in mind:
1. Check which law applies
Which law applies to your terms of engagement may very much depend on the type of activity for which you're hiring the candidate. Where they will be performing the agreed activities will also affect this position.
If your worker will perform all their duties outside the UK and perhaps contracts their services via their own foreign-established business, UK law may not be able to govern your contract terms. Your worker may even expect to be engaged on local law terms and that could be a condition of their agreement to work for you.
It may not seem like a big deal, but if a dispute later arises, for example, about the quality of work product or the timeliness of its delivery, UK law may not apply and a UK court may not be able to hear the case. Plus, you can't always contract out of some local law terms, even if you can get your worker to agree that UK law should apply.
So, it's important to know what you're signing up to - and, even if you don't sign anything, how a court (UK or foreign) would interpret the terms of any verbal agreement between you and your international worker.
The best way to get certainty about what you're signing up to, and how that impacts your business, is to take some expert advice and to put in place a contract that clearly sets out what you and the worker agree to.
2. Beware of false economies
While it's often the case that hiring overseas is cheaper than hiring within the UK, you may encounter additional expenses due to exchange rates, tax requirements and admin fees. These are worth bearing in mind if budget is a large part of your hiring approach.
3. Use a contract
Just as you should when hiring someone within the UK, ensure everything you agree is clearly put in writing before work commences. This includes everything you would usually put in an employment contract, including work schedules, payments, confidentiality, IP ownership, and so on. Make sure that there's no doubt from either you or the worker as to what the working agreement is.
You'll be able to modify our employment contract template for senior staff or our employment contract template for non-senior staff to help you put the right kind of arrangement in place too – although we strongly recommend that you use our Speak To A Lawyer service to ensure that you end up with a document that is fully suitable for your circumstances and can be enforced in your favour if you later need to do so.
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